Tag Archives: beverages

Niall O’Reilly, who organised the Hangzhou leg of the Irish Exporters’ Association trip to China which we reported on last month, says an offer by Wahaha chief Zong Qinghou to attend the company’s annual internal distributor exhibition marks a “very rare China market opportunity not to be missed”.

China’s richest man, with almost €9 billion in personal assets, Zong is trying to diversify his company, the country’s biggest domestic beverage group, by opening 18 self-run shopping malls, 35 franchising malls and a further 300 franchising stores by the end of 2015.

Wahaha has a nationwide distribution network of about 10,000 distributors, over 100,000 wholesaler and three million sales terminals. It employs more than 60,000 people, has 150 subsidiary companies and 60 manufacturing bases scattered throughout China.

“This is a man whose primary interest in working with foreign companies is to bring into China products which Chinese companies are poor at making. If he likes a product, his nod is as good as a wink to Wahaha’s distribution network,” said O’Reilly, head of the AccurateGroup.

China is set to become Ireland’s fourth largest export market in the next decade, and the retail sector offers huge market potential for Irish food, beverage and clothing companies. Over 300 million people in China now have disposable income to purchase on non-essential goods that was not possible even back in the 1990s, while Chinese government policies aim to double household incomes by 2020.

“And so to the prosperous east of China, to the cities of Suzhou and Hangzhou, where the Irish Exporters Association (IEA) organised a trade mission that included a meeting with mainland China’s richest man: Zong Qinghou.

There is a Chinese proverb: “In heaven there is paradise, on earth Suzhou and Hangzhou.”

As well as being pleasant cities, they are important business locations, and they fit right in with the current thinking on how to exploit the China market best. That involves focusing on second-tier cities that have large populations.

Hangzhou has 9.5 million inhabitants, while Suzhou has 12 million, which is why the IEA’s Asia Trade Forum chose them for its business visit.

“This is all about taking a phased approach to Asia, and getting to know Asia better,” said Hugh Kelly, the chairman of the IEA’s Asia Trade Forum.

“We wanted to get people out here and get them over the hump of making the trip. We wanted to try to get people to experience China and better inform them if it’s the market for them.”

The IEA’s director for China, Niall O’Reilly, is a long-time Hangzhou resident and he orchestrated the coup of arranging a meeting with Mr Zong.

He is estimated to have a personal wealth of 82 billion yuan (€10.23 billion) and is the chairman of the privately held Wahaha group, China’s top homegrown beverage firm, producing bottled water, tea and other drinks, which had pre-tax profits of €1.23 billion last year.

A chain-smoking member of China’s annual parliament, the National People’s Congress, Mr Zong is famously frugal, spending just $20 (€15) a day on himself. He is the third-richest man in Asia and 23rd richest in the world.

His knowledge of Ireland was extremely limited, something the delegates were keen to remedy, but he seemed receptive to the possibilities offered by Ireland – the visit was supposed to be 20 minutes’ long but went on for one and a half hours.

Wahaha has about 60 factories in 29 provinces, and it also makes baby formula and children’s clothes.

The Wahaha group has considerable geographical spread in China and Mr Zong said that he can get a new product into two million shops inside of a week.

“Mr Zong was very interested in what Ireland had to offer,” said Mr Kelly.

Zong Qinghou, Chairman of Hangzhou Wahaha

During the visit, Mr Zong invited the IEA to attend a Wahaha event in three weeks’ time, which will be an opportunity to pitch products to the 20 shopping malls owned by Wahaha.

Among the companies taking part on the delegation was Áine Handmade Chocolates. Owner and chocolatier Anne Rudden was impressed by the scale of operations at Wahaha.

“I was here on this trip to see if there were opportunities, so I got more than I thought out of it. Meeting with Mr Zong was the best. And choosing Hangzhou seems to have been a good idea,” said Ms Rudden.

Mr Zong also tried Darling Cocktails’ ready-to-serve cocktail.

Mr Kelly said that while companies were happy to go to the US six times a year, companies found the trip to Asia more daunting and had less of a presence as a result.“Everyone is going home with a great impression. There are a lot of layers here and we’ve achieved more than we expected on this trip. You have to come here to see the scale on which they plan,” said Mr Kelly, the chief executive of Associated Marketing.

Unlike other Government trade missions, the IEA trade delegation had the benefit of not having to meet political obligations.

Mr Kelly said the choice of Hangzhou and Suzhou as the main venues for the trip was part of a plan to match Irish companies with their counterparts in smaller cities.

“Many Irish companies are small and medium-sized companies and are very small in China. If you pair off with someone too big you will fade,” said Mr Kelly.

The delegation also visited the Hangzhou Economic Development Authority and was received by the local government.